Macroeconomic-adjusted credit risk score systems and methods

• US 8,024,263 B2
• Filed: 01/19/2010
• Issued: 09/20/2011
• Est. Priority Date: 11/08/2007
• Status: Active Grant

• Current Assignee: Equifax, Inc.
• Original Assignee: Equifax, Inc.
• Inventors: Micheloud, Natalia, Zippe, John, Zarikian, Lisa
• Primary Examiner(s): Colbert; Ella
• Assistant Examiner(s): OJIAKU, CHIKAODINAKA
• Application Number:
  US12/689,288
• Publication Number:
  US 20100145847A1
• Time in Patent Office: 609 Days
• Field of Search: 705/36, 705/39, 235/80, 345/55, 345/418, 345/440
• US Class Current: 705/38
• CPC Class Codes: G06Q 10/067 Enterprise or organisation modelling
• CPC Class Codes: G06Q 20/10 specially adapted for electronic funds transfer [EFT] systems; specially adapted for home banking systems
• CPC Class Codes: G06Q 40/00 Finance; Insurance; Tax strategies; Processing of corporate or income taxes
• CPC Class Codes: G06Q 40/03 Credit; Loans; Processing thereof
• CPC Class Codes: G06Q 40/04 Trading; Exchange, e.g. stocks, commodities, derivatives or currency exchange

Abstract

Various embodiments of the present invention provide systems and methods for automatically compensating an individual'"'"'s credit risk score for macroeconomic data. In particular, various embodiments provide systems and methods to determine a macroeconomic risk score. In addition, various embodiments provide systems and methods to determine an adjusted credit risk score for an individual based on the individual'"'"'s credit risk score and a macroeconomic risk score that serves as a scale adjuster to keep overall delinquency and/or loss rates in line as economic factors change.

Claims

1. A computer-implemented method for determining a macroeconomic risk score used for adjusting an individual'"'"'s credit risk score, said method comprising the steps of:

a) obtaining a sample of consumer credit data stored in memory, said sample of consumer credit data comprising credit data associated with a plurality of consumers over a first period of time covering one or more economic conditions;

b) determining performance for each consumer represented in said sample of consumer credit data, via one or more computing devices, based on each consumer'"'"'s financial history reflected in said sample of consumer credit data, wherein said consumer'"'"'s performance is utilized as a dependent attribute;

c) obtaining data of one or more econometric factors associated with macroeconomics stored in said memory, said data of one or more econometric factors comprising data of said one or more econometric factors over a second period of time prior to said first period of time, wherein said one or more econometric factors are utilized as one or more independent attributes; and

d) determining said macroeconomic risk score, via said one or more computing devices, by utilizing said dependent attribute, said one or more independent attributes, and applying a statistical technique for modeling, wherein said macroeconomic risk score reflects an effect of macroeconomic changes on said individual'"'"'s credit risk score.

2. The method of claim 1, further comprising the steps of:

e) obtaining said individual'"'"'s credit risk score stored in said memory;

f) developing a model implemented by said one or more computing devices that automatically compensates said individual'"'"'s credit risk score by adjusting said individual'"'"'s credit risk score based on said macroeconomic risk score; and

g) outputting an adjusted credit risk score for said individual by utilizing said model.

3. The method of claim 2, further comprising the step of:

h) offering credit to said individual based on said individual'"'"'s adjusted credit risk score.

4. The method of claim 2, wherein said model comprises a matrix comprising macroeconomic risk scores and unadjusted credit risk scores.

5. The method of claim 2, wherein said model is developed via a statistical technique.

6. The method of claim 1, wherein said econometric factors comprise at least one data series selected from the group consisting of an inflation rate, an unemployment rate, or a consumer confidence level, or combinations thereof.

7. The method of claim 1, wherein said econometric factors comprise at least one data series aggregated at a level of geography or a demographic segment, or both, said data series selected from the group consisting of a number of open trades, an average credit limit, or an average credit card balance, or combinations thereof.

8. The method of claim 1, wherein said econometric factors are obtained at a level of geography.

9. The method of claim 1, wherein said statistical technique is a nonlinear statistical technique.

10. The method of claim 1, wherein a weighting scheme is utilized to weight data in a development sample that includes said sample of consumer credit data and said econometric factors.

11. The method of claim 10, wherein said econometric factors are obtained at a level of geography and said weighting scheme is based on a number of consumers in each of said level of geography so that said development sample comprises one observation per each said level of geography and an observation point, and each said observation is given a weight equal to said number of consumers in that said level of geography.

12. The method of claim 10, wherein said econometric factors are obtained at a level of geography and said weighting scheme is based on building said development sample by including an observation for each consumer in each said level of geography and each said consumer is given an equal weight.

13. The method of claim 10, wherein said weighting scheme is based on said level of geography and each of said level of geography is weighted equally.

14. A system for determining a macroeconomic risk score, said system comprising:

a processor adapted to execute a macroeconomic risk score module; and

a memory coupled to said processor and adapted for storing said macroeconomic risk score module, wherein;

said macroeconomic risk score module is adapted for execution by the processor to;

obtain a sample of consumer credit data comprising credit data associated with a plurality of consumers over a first period of time covering one or more economic conditions;

obtain a performance determination for each of said consumers in said sample of consumer credit data based on each consumer'"'"'s financial history reflected in said sample to be utilized as a dependent attribute;

obtain data of one or more econometric factors associated with macroeconomics to be utilized as one or more independent attributes, said data comprising data of said one or more econometric factors over a second period of time prior to said first period of time; and

calculate a macroeconomic risk score by utilizing said dependent attribute, said one or more independent attributes, and applying a statistical technique for modeling, wherein said macroeconomic risk score reflects an effect of macroeconomic chances on an individual'"'"'s credit risk score.

15. The system of claim 14, wherein the processor is further adapted to execute a risk model adjustment module, said risk model adjustment module is adapted for execution by the processor to determine an adjusted credit risk score for said individual by obtaining said individual'"'"'s credit risk score and automatically compensating said individual'"'"'s credit risk score by adjusting said individual'"'"'s credit risk score based on said macroeconomic risk score.

16. The system of claim 15, wherein said risk model adjustment module determines said individual'"'"'s adjusted credit risk score based on a matrix comprised of macroeconomic risk scores and credit risk scores.

17. The system of claim 15, wherein said risk model adjustment module determines said individual'"'"'s adjusted credit risk score based on a model developed via a statistical technique.

18. The system of claim 15, wherein said risk model adjustment module is further adapted to determine whether to offer credit to said individual based on said individual'"'"'s adjusted credit risk score.

19. The system of claim 18, wherein said risk model adjustment module is further adapted to output said determination as to whether to offer credit to said individual.

20. A computer-readable storage medium executable by a processor to determine a macroeconomic risk score, said computer-readable storage medium comprising:

a first code memory portion executable by said processor to;

obtain a sample of consumer credit data comprising credit data associated with a plurality of consumers over a first period of time covering one or more economic conditions;

obtain a performance determination for each of said consumers in said sample of consumer credit data based on each consumer'"'"'s financial history reflected in said sample to be utilized as a dependent attribute;

obtain data of one or more econometric factors associated with macroeconomics to be utilized as one or more independent attributes, said data comprising data of said one or more econometric factors over a second period of time prior to said first period of time; and

calculate a macroeconomic risk score by utilizing said dependent attribute, said one or more independent attributes, and applying a statistical technique for modeling, wherein said macroeconomic risk score reflects an effect of macroeconomic chances on an individual'"'"'s credit risk score.

21. The computer-readable storage medium of claim 20 comprising:

a second code memory portion executable by said processor to determine an adjusted credit risk score for said individual by obtaining said individual'"'"'s credit risk score and automatically compensating said individual'"'"'s credit risk score by adjusting said individual'"'"'s credit risk score based on said macroeconomic risk score.

22. A computer-implemented method for determining an adjusted credit risk score for an individual, said method comprising, by one or more computing devices, automatically adjusting said individual'"'"'s credit risk score by applying a model based on a macroeconomic risk score, wherein said macroeconomic risk score is derived by:

a) obtaining a sample of consumer credit data, said sample of consumer credit data comprising credit data associated with a plurality of consumers over a first period of time covering one or more economic conditions;

b) determining individual performance for each consumer represented in said sample of consumer credit data based on each consumer'"'"'s financial history reflected in said sample of consumer credit data, wherein said individual performance is utilized as a dependent attribute;

c) obtaining data of one or more econometric factors associated with macroeconomics, said data of one or more econometric factors comprising data of said one or more econometric factors over a second period of time prior to said first period of time, wherein said one or more econometric factors are utilized as one or more independent attributes; and

d) determining said macroeconomic risk score by utilizing said dependent attribute, said one or more independent attributes, and applying a statistical technique for modeling.